The Effect of Dividend Payout of Loss and Gain Firms on Corporate Bond Ratings

Jung, Hyun-Uk

doi:10.24056/kaj.2019.08.005

Cited by 1 publication

(2 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As discussed above, a competitive environment acts as a form of external governance of a firm, thereby reducing agency costs and promoting efficient management [21,22,25,26] and, in turn, reducing the risk premium in the capital market [27]. Therefore, the lower the competition intensity, the lower the company's credit rating [28], and further, the negative effect between environmental risk and credit rating may become stronger. This is because, if competition, which plays a role as governance, is weak, environmental risks that negatively affect firm value may increase.…”

Section: Hypothesis 1 (H1) Environmental Risk Harms Corporate Bond Cr...mentioning

confidence: 99%

See 1 more Smart Citation

Environmental Risk and Credit Ratings, and the Moderating Effect of Market Competition

김

Kim

2022

IJERPH

View full text Add to dashboard Cite

This study examines the relationship between environmental risk and corporate bond credit ratings, and the moderating effect of market competition. We focus on Korean firms that are facing increasing risk of environmental crisis after the COVID-19 pandemic. Recently, the Korean government has been controlling businesses while promoting policies to transform the economy into a low-energy, low-carbon economy. We find that a firm’s greenhouse gas emission and energy consumption, which are direct indicators of environmental risk, are negatively associated with bond credit ratings. We also report that the negative effect of environmental risk on credit ratings is stronger in firms with low market competition. This study contributes to prior research by improving the understanding of the effect of environmental risk on credit ratings. In particular, it is significant to examine the effect of environmental risk, measured as direct environmental performance not affected by green washing, on credit rating. Therefore, we shed light on environment-oriented management beyond the determinants of credit ratings, which have been discussed in previous studies. We also suggest that policymakers need to manage market competition in terms of environmental justice, given that market competition has a significant moderating effect on the relationship between environmental risk and credit ratings.

show abstract

Section: Hypothesis 1 (H1) Environmental Risk Harms Corporate Bond Cr...mentioning

confidence: 99%

“…Therefore, the lower the competition intensity, the lower the company's credit rating [28], and further, the negative effect between environmental risk and credit rating may become stronger. This is because, if competition, which plays a role in governance, is weak, environmental risks that negatively affect the firm value may increase.…”

Section: Introductionmentioning

confidence: 99%

Environmental Risk and Credit Ratings, and the Moderating Effect of Market Competition

김

Kim

2022

IJERPH

View full text Add to dashboard Cite

show abstract

The Effect of Dividend Payout of Loss and Gain Firms on Corporate Bond Ratings

Cited by 1 publication

References 0 publications

Environmental Risk and Credit Ratings, and the Moderating Effect of Market Competition

Environmental Risk and Credit Ratings, and the Moderating Effect of Market Competition

Contact Info

Product

Resources

About